Late last year, the Department of Labor’s Employee Benefits Security Administration (EBSA) published its final regulations regarding the ERISA process that will affect all claims for benefits filed after the 1st of January, 2018.
The new rules apply to all ERISA-qualifying plans that provide disability benefits, including short-term and long-term disability plans. The regulations also apply to any other plans that condition the availability of benefits upon the plan’s determination that the participant is disabled, such as 401(k) plans and pension plans. However, the regulations will not apply if a pension plan provides a benefit conditioned upon disability, but the finding is made by someone other than the plan, such as the Social Security Administration for purposes other than determining benefits under the plan.
The new regulations add certain regulations to the application process for benefits under ERISA. For instance, the regulations make clear that claims and appeals need to be determined impartially and independently and that administrators should not be encouraged to issue a denial of claims. This means that administrators are prohibited from:
When issuing denial letters, adjudicators are also required to include specific information, such as:
Finally, denial letters must be appropriate based on culture and linguistics, which could require administrators to take the following steps:
The regulations also address changes to the appeals process. For instance, if a denial is based on new evidence, claimants are required to be provided notice and a reasonable opportunity to issue a response before an appeal can be denied. Letters for a denied appeal must also include information about any time limits involved with filing a lawsuit, such as the date that the limitation period expires. Furthermore, claimants will now no longer be barred from filing a claim in court because they failed to exhaust the plan’s internal claims procedures, but only if the plan itself did not comply with its procedures. However, this is only true for major failures. Finally, retroactively rescinding coverage is now considered a denial of benefits for the purposes of triggering the appeals process.
The new rules could have important repercussions for employees who receive benefits under an employer-sponsored plan, so if you live in Chicago and were denied disability benefits, please contact Michael Bartolic, LLC at (312) 635-1600 to schedule a free consultation with a skilled long-term disability attorney today.